The Great Depression, Causes of the Depression
Easy credit, durable goods, stock market crash, Great Depression, debt burden
The stock market crash of 1929 did not cause the Great Depression, but rather signaled its onset. The crash and the depression sprang from the same cause: the weaknesses of the 1920s economy. An unequal distribution of income meant that working people and farmers lacked money to buy durable goods. Crisis prevailed in the agricultural sector, where farmers produced more than they could sell, and prices fell. Easy credit, meanwhile, left a debt burden that remained unpayable.
The crisis also crossed the Atlantic. The economies of European nations collapsed because they were weakened by war debts and by trade imbalances; most spent more on importing goods from the United States than they earned by exporting. European nations amassed debts to the United States that they were unable to repay. The prosperity of the 1920s rested on a weak foundation.
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